It’s not hard to come across bearish assessments of the PC market, but Sterne Agee analyst Shaw Wu has delivered one of the most pessimistic projections of the PC market yet. As AppleInsider reports, Wu sent a new note to investors this week projecting PC shipments to grow by a mere 2% in 2013, as growth of both the Apple (AAPL) iPad and OEM “confusion” over how to best utilize Windows 8 takes its toll on Microsoft’s (MSFT) operating system market share.

“The feedback we have gotten from supply chain sources is that there is great confusion, as there are too many form factors (PC notebooks, tablets, ultrabooks, and convertibles) and most do not know what to build and will actually sell,” writes Wu, who also thinks that PCs will “become more of a niche” going forward rather than a staple of home and business computing.

Wu also thinks that Microsoft is more likely to see a growth in demand for Windows 7 machines from former Windows XP customers who will upgrade to new machines but who aren’t fully comfortable with Windows 8’s touchscreen capabilities.